For the
reasons set forth herein, the Motion to Extend Grant Thornton
Discovery[3] is DENIED.

I.
Background

On
March 1, 2013, Plaintiffs filed this suit against 23
defendants, including the Citco Defendants, asserting claims
under the Louisiana Securities Act and Louisiana Unfair Trade
Practices Act, as well as third party beneficiary, unjust
enrichment, breach of contract, negligent misrepresentation,
and general tort claims.[4] Plaintiffs' claims arise from a
$100 million investment loss. In April of 2008, the Louisiana
Funds purchased 100, 000 Series N Shares offered and issued
by FIA Leveraged Fund (“Leveraged”) for $100
million.[5] After a series of investment transactions
initiated by Leveraged, in March of 2011, Plaintiffs sought
to redeem their Series N shares.[6]Ultimately, the shares went
unredeemed and Plaintiffs determined that the investment was
illiquid and, thus, the N shares, for which there was no
market, were valueless.[7]

By the
instant Motion to Extend Grant Thornton Discovery, Plaintiffs
move this court to modify and amend the February 9, 2018
Amended Scheduling Order[8] solely for the purpose of extending the
discovery deadline as to third party, Grant Thornton LLP
(“GT”) through May 16, 2018.[9] The current fact
discovery deadline expired on March 15, 2018.[10] A jury trial
is scheduled to begin on January 28, 2019.[11]

II.
Law and Analysis

Pursuant
to Fed.R.Civ.P. 16(b)(4), a scheduling order “may be
modified only for good cause and with the judge's
consent.”[12] The Fifth Circuit has explained that a
party is required “to show that the deadlines cannot
reasonably be met despite the diligence of the party needing
the extension.”[13] A trial court has broad discretion to
preserve the integrity and purpose of its pretrial orders,
“which, toward the end of court efficiency, is to
expedite pretrial procedure.”[14]

“The
U.S. Fifth Circuit Court of Appeals has applied a four-factor
balancing test in certain contexts to determine whether good
cause exists to modify a scheduling order by weighing (1) the
explanation for the failure to adhere to the deadline at
issue; (2) the importance of the proposed modification to the
scheduling order; (3) potential prejudice; and (4) the
availability of a continuance to cure such
prejudice.”[15] “Notwithstanding this four-factor
test, the court still has the ‘inherent power to
control its own docket to ensure that cases proceed before it
in a timely and orderly fashion.'”[16] “The
purpose of a scheduling order is to allow the district court
to control and expedite pretrial discovery matters.
Scheduling orders and their enforcement are regarded as
essential in ensuring that cases proceed to trial in a just,
efficient, and certain manner.”[17] “To
achieve this end, the Court is given broad discretion so that
the integrity and purpose of the pretrial order may be
preserved.”[18]

Plaintiffs
seek a two-month extension of the discovery deadline to allow
time to obtain documents responsive to a subpoena duces tecum
served on Grant Thornton LLP. Plaintiffs explain that they
served a subpoena duces tecum to Grant Thornton, LLP on
December 18, 2018 (the “Grant Thornton Subpoena”)
“seeking a very limited scope of
documents…” and that GT served objections to the
Funds' subpoena on January 2, 2018.”[19]
Plaintiffs' counsel asserts that following Grant
Thornton's objections, he “conducted phone
conferences with GT's counsel on January 22, 2018,
January 31, 2018, February 12, 2018, and February 28,
2018”[20] and engaged in “an ongoing
dialogue of emails and letters from January 25, 2018 through
as recently as March 5, 2018”[21] in the hopes of finding
an amicable resolution. Plaintiffs further contend that Grant
Thornton is aware of the discovery cutoff date in this suit
“and has chosen to ‘stonewall' its responses
in hope of getting past these deadlines”[22] and that
“GT has taken the position that it will not respond to
the Funds' subpoena because it responded to a similar
subpoena to GT from the Trustee in In re Fletcher
International Ltd., Case No. 12-12896, U.S. Bankruptcy
Court, Southern District of New York.”[23] In light of
Grant Thornton's opposition to the Subpoena, Plaintiffs
seek a limited extension of the fact discovery deadline
through May 16, 2018 to allow Plaintiffs time to obtain
counsel in Illinois (the state in which Grant Thornton is
allegedly domiciled), “file the appropriate discovery
motion in the Illinois court, and to obtain responsive
documents to the Funds' subpoena from
GT.”[24]

In
opposition, Defendants contend that there is no good cause
pursuant to Fed.R.Civ.P. 16(b)(4) to modify the scheduling
order.[25] Defendants argue that Plaintiffs have
known that Grant Thornton might have relevant documents since
2013, when Plaintiffs named Grant Thornton International,
Ltd. as a defendant in this suit, and that Defendants
instructed Plaintiffs to seek certain documents directly from
Grant Thornton in March 2017.[26] Defendants point out that the
issue of Grant Thornton's opposition to the subpoena was
raised at numerous monthly status conferences with the court
and that despite Grant Thornton's January 2018 objection,
Plaintiffs still have not retained local counsel or filed a
motion to compel against Grant Thornton.[27]

The
undersigned agrees that Plaintiffs have known that some Grant
Thornton entity may have relevant documents as early as 2013.
Plaintiffs' 2013 Petition in this suit named Grant
Thornton International, Ltd. as a defendant.[28] Additionally,
on January 17, 2014, Plaintiffs filed a separate suit against
Grant Thornton, USA.[29] In both suits, Plaintiffs alleged that a
Grant Thornton entity prepared audit reports for Leveraged
and Arbitrage for the years ending December 31, 2007 and
December 31, 2008 and thereafter issued restated reports
indicating that the net worth of Arbitrage had been
overstated.[30]

The
issue of Plaintiffs' ability to obtain documents via the
Grant Thornton Subpoena has been discussed with Plaintiffs at
numerous status conferences with the undersigned. During a
January 12, 2018 status conference, the undersigned advised
Plaintiffs to “continue to work with…Grant
Thornton to resolve issues related to the subpoenas, but also
to be cognizant of the March 14 [sic], 2018 discovery
deadline and to file any necessary motions regarding
compliance with [the Grant Thornton Subpoena] with enough
time to allow the appropriate court to rule
thereon.”[31] During a February 8, 2018 status
conference, Plaintiffs reported that they were still
negotiating with Grant Thornton regarding the
Subpoena.[32] The court stated that it was not
inclined to extend the discovery cutoff date past March 15,
2018, and instructed Plaintiffs to proceed expeditiously with
their discovery efforts to meet that deadline.[33] On March 6,
2018, Plaintiffs reported that Grant Thornton had refused to
produce documents in response to the Subpoena.[34] During that
conference, the undersigned asked Plaintiffs if it was
possible for Plaintiffs to identify which documents in the
trustee's database were those previously produced by
Grant Thornton and whether Plaintiffs had asked Grant
Thornton to provide the same documents to Plaintiffs that had
been previously provided to the Trustee as a means of
resolving the dispute regarding the Subpoena.[35]

While
the undersigned commends Plaintiffs' counsel's
efforts to reach an amicable resolution with Grant Thornton
via telephone conferences and correspondence, the court made
it clear to Plaintiffs on numerous occasions that it was
disinclined to extend the discovery deadline with respect to
Grant Thornton and that Plaintiffs were to proceed in a way
to ensure they obtained any necessary discovery from Grant
Thornton prior to the March 15, 2018 deadline. Three months
prior to the discovery cutoff date, the undersigned
instructed Plaintiffs “to file any necessary motions
regarding compliance with [the Grant Thornton Subpoena] with
enough time to allow the appropriate court to rule
thereon.”[36] Despite this instruction, it appears
Plaintiffs have done nothing to allow the appropriate court
to consider Plaintiffs' request for documents via the
Grant Thornton Subpoena. Indeed, based on Plaintiffs' own
assertion that they need an additional two months to
retain local counsel and file a discovery motion in
Illinois district court, it appears that Plaintiffs have not
yet even taken the first step necessary to litigate this
issue in the appropriate court.[37] Based on Plaintiffs'
knowledge of issues regarding Grant Thornton at the onset of
this litigation, as well as the undersigned's
instructions to Plaintiffs regarding the timing of such
discovery, the undersigned finds that Plaintiffs have not met
their burden of showing that the March 15, 2018 deadline
could not have been met despite Plaintiffs' diligence.
Accordingly, the undersigned DENIES
Plaintiff's Motion to Extend Grant Thornton
Discovery.[38]

III.
Conclusion

For the
reasons set forth herein, IT IS HEREBY
ORDERED that Plaintiffs' Motion to Extend
Discovery on Grant Thornton LLP after the March 15, 2018
Discovery Cutoff and Request for Expedited
Consideration[39] is DENIED.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IT
IS FURTHER ORDERED that Plaintiffs' request for
expedited ...

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